Health Insurance Marketplaces

The ACA requires the establishment of health insurance marketplaces (formerly known as exchanges) for individuals to purchase private health insurance. They are intended for individuals without access to affordable employer-provided health insurance or public health insurance programs. The marketplaces will be run by the federal government if the state chooses not to establish a marketplace. As of May, 2013:

27 states will have a federally run marketplaces

17 states will run their own marketplaces

7 will run their marketplaces in partnership with the federal government

What is the marketplace timeline?

October 1, 2013 - Enrollment begins

January 1, 2014 - Coverage begins

March 31, 2014 - Initial open enrollment ends

What types of private health insurance coverage will be provided?

The ACA requires that plans sold in the marketplace be similar to typical employer plans. HHS has implemented this provision by requiring states to choose an existing plan as a benchmark plan. States are given significant flexibility to pick from several different types of plans to be the benchmark. Once a state selects the plan to be their benchmark, the state will check to make sure it covers the 10 categories of health care services known as the essential health benefits. HHS did not define the benefit categories or provide guidance on what would be adequate coverage. This leaves much room for state flexibility and insurance company discretion.

What are the 10 categories of health services (known as the essential benefits) that each plan sold in the exchange must provide?

Will all the plans provide the same level of insurance coverage?

Plans that offer essential benefits can offer varying levels of coverage and plan design. There will be four levels of plan coverage. The percentages below refers to the average amount the insurance plan will pay for covered services. It does not mean that the insurance company will charge the person 40% of the cost of every service in a bronze plan. It is an average measure of the cost-sharing required. The more the plan pays, the more generous the benefit. More generous plans may mean higher monthly premiums. However, people with many health needs may want to purchase more generous coverage to limit their out of pocket costs.

Will the coverage be affordable?

There are subsidies for low and moderate income individuals and limits on out of pocket expenses for covered benefits.(link to the updated premium tax credit page) the Individuals and families with incomes between 100 – 400% of the federal poverty level are eligible for subsidies IF they are not covered by Medicaid, Medicare, VA, Tricare and employer sponsored health insurance. Specifically all group plans must limit out of pocket expenses for covered benefits, using the same out of pocket limits that apply to high deductible plans that are used with Health Savings Accounts ($5,950 for an individual and $11,900 for family coverage in 2010). In the small group market, they must limit deductibles to $2,000 for individuals and $4,000 for families in 2014. After that, these limits will be updated each year as average premiums increase.

How do employers participate in exchanges?

Participation is open to small employers/non-profits (100 employees or less OR 50 employees or less if the state defines them this way). Participation is also open to large employers at each state's discretion starting in 2017. Non-profits are also eligible to participate in the Small Business Health Options Program Exchange.